How a recession could impact the housing market

As of right now, it appears that the United States is spiraling into another economic recession. The last one started around 2009, and when it ended, home values began to climb. That’s been true until now. Will a second recession so close to the first one send them plunging off of a cliff?

Some have predicted massive drops, but others think there is no reason to panic. They point out that the recession in 2009 started directly because of the housing crisis. A lot of foreclosures happened all at once. People had been given bad mortgages. The system came apart, and the recession hit a lot of industries, but it hit housing and banking so hard because that’s where it started.

“Today we are looking at a recession not caused by the housing market,” said Zillow executive Jeff Tucker in an interview with WTOP. “So it is a very different story today.”

That does not necessarily mean it will have no impact at all. If people lose their jobs, they likely will not be able to afford homes or qualify for the mortgages that they’d need to buy them. That could push prices down by decreasing the demand from buyers. Homes that saw their values surge when the job market recovered and there was more money to go around could see the opposite impact today.

It’s also worth noting that the “wave of foreclosures” could happen again, depending on how things play out. It would not be caused by bad mortgages this time, but by job loss and company closings. Those involved in the real estate market during this uncertain time need to know what steps to take.